A new report published by the Mining Association of Canada warns the country risks losing its global dominance in the industry, despite recent government initiatives to improve competitiveness, following the merger of Canada’s two largest gold companies, Barrick Gold and Goldcorp stand to erode the national sector’s global influence.
The merger has resulted in job cuts and further decentralization away from Canada, a trend that will likely increase under Barrick’s newly inked joint-venture in Nevada with Newmont Mining. Meanwhile, Newmont’s proposed takeover of Goldcorp will see the combined entity headquartered in Colorado, with only a regional office remaining in Vancouver.
In a news release, CEO of the MAC Pierre Gratton said, “For decades, our industry has been a leader in the production of minerals and metals. A leader in mining services and supplies. A leader in mine finance. A leader in sustainability and safety, but that position is in jeopardy and will be lost without continued, decisive action at both the federal and provincial levels.”
Key findings in the report include:
Canada’s share of international exploration spending has fallen for six years in a row
Over five years, the country has lost its ‘top five’ ranking as a producer in seven out of 16 commodities where it held that position
Capital investment in the mining sector has fallen every year since 2012
Australia has extended its lead on Canada in terms of the number of companies supplying the sector and as a percentage of total foreign direct investment
Despite this, the sector still represents 5 percent of total nominal GDP and 19 percent of the value of Canadian goods exports in 2017
The Toronto Stock Exchange and Venture Exchange raised nearly one-third of the world’s total equity capital in the sector in 2017, making them top mining and exploration listing exchanges.
The report concludes with the recommendation of renewing the Mineral Exploration Tax Credit for a five-year term, along with other government initiatives, to help reverse the trend but said more policies are required.